Economists and labor analysts warn that steady monthly job gains may not last, thanks to the administration’s aggressive immigration policies, Politico reported Sunday.
At the center of concern is President Donald Trump's sweeping budget package, which he signed into law Friday. The controversial new law allocates a staggering $150 billion to bolster border security and expand deportation efforts. Critics argue that this crackdown on immigration is beginning to erode the foreign-born labor force that many sectors of the United States economy rely on.
Last month, Federal Reserve Chair Jerome Powell pointed to immigration-related drops in the labor force as a possible barrier to future economic growth.
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“When you significantly slow the growth of the labor force, you will slow the growth of the economy,” he told lawmakers at the time.
“It’s not for us to have a view on immigration policy. Growth will slow — and actually is slowing — and that’s one of the reasons," he added.
Meanwhile, the government reported Thursday that the foreign-born workforce shrank for the third consecutive month in June, even as employers surpassed forecasts by adding 147,000 jobs overall.
Despite the decline, White House officials maintain that the economy won't suffer. They argue that the sweeping immigration legislation will motivate more Americans to join the labor force. But others warn that the administration’s immigration crackdown is likely to weaken the labor market, per the report.
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Daniel Zhao, the lead economist and senior manager at Glassdoor’s economic research team, told Politico: “If the job market slows, then we should expect economic growth to follow."
But Stephen Miran, chair of the Council of Economic Advisers and Trump’s top economic adviser, pushed back against the prevailing view among economists in his comment to Politico. He argued that the domestic labor force is more than capable of filling gaps left by a shrinking immigrant workforce.
Not everyone is convinced. Economists at Deutsche Bank warned clients this week that lower immigration levels could significantly reduce the number of jobs the economy needs to add each month just to maintain stability — potentially dropping the breakeven point to 50,000 jobs.
The report notes that that projection aligns with internal Labor Department estimates and is far lower than the job growth targets many economists believed were necessary under the more immigration-friendly policies of the Biden administration.
AlterNet reached out to the Labor Department for comment.